President Donald Trump has announced that the United States will allow tech giant Nvidia to sell its second-most powerful AI chips to “approved customers” in China and other countries, with the condition that the U.S. government receives a 25 percent share of the sales revenue.
CNBC reports that President Donald Trump has given the green light to Nvidia to sell its H200 AI chips, the tech giant’s second-most powerful chips, to “approved customers” in China and other countries. The decision comes with a unique condition – the U.S. government will receive a 25 percent cut of the sales revenue. Trump, in a Truth Social post, revealed that Chinese President Xi Jinping “responded positively” to this proposal.
According to Trump, the move is expected to support American jobs, strengthen U.S. manufacturing, and benefit taxpayers. The Department of Commerce is currently finalizing the details of this arrangement, which will also apply to other major American chipmakers such as AMD and Intel.
This announcement follows an earlier agreement in August, where both Nvidia and its rival AMD agreed to share 15 percent of their revenue from China chip sales with the U.S. government. However, around the same time, China reportedly warned companies against using the H20 AI chip, a product designed specifically for the Chinese market by Nvidia. The H200 chip, while not Nvidia’s top-of-the-line product, is a higher-grade chip compared to the H20.
A spokesman from Nvidia applauded President Trump’s decision, stating that it allows America’s chip industry to compete and support high-paying jobs and manufacturing within the country. The spokesman added that offering the H200 chip to vetted commercial customers, approved by the Department of Commerce, strikes a thoughtful balance that benefits America.
Semiconductors, crucial components in nearly all categories of electronics, are at the heart of the AI race between the United States and China. They have also played a significant role in the complex trade relationship between the two economic superpowers. In the past, when Beijing imposed export controls on rare-earth minerals, which are essential for the production of some high-end chips, the Trump administration threatened to substantially increase tariffs on U.S. imports from China.
Following a meeting in South Korea in late October, Trump and Xi reached a tentative trade truce, with China committing to end “retaliation” against U.S. chipmakers, according to the White House. Trump also mentioned that he discussed the export of Nvidia chips with Xi during that meeting.
Breitbart News reported in November that Huang said China would win the AI race, before walking back those comments:
In a stark warning from the head of the world’s most valuable company, Nvidia CEO Jensen Huang has asserted that China is set to emerge victorious in the global competition for AI dominance. Speaking at the Financial Times’ Future of AI Summit, Huang highlighted the contrasting approaches taken by the two superpowers, with China benefiting from lower energy costs and a more flexible regulatory environment. Huang’s comments were unambiguous — the Times quotes him as saying, “China is going to win the AI race.”
Huang’s comments come amidst ongoing tensions between the US and China over advanced technology, particularly in the semiconductor industry. The Trump administration recently maintained a ban on Nvidia selling its most advanced chips to Beijing, despite a meeting between U.S. President Donald Trump and Chinese leader Xi Jinping.
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After facing backlash to his China comments, Huang began backpedaling by issuing a statement on X. After telling the FT that “China is going to win the AI Race,” now the company says “It’s vital America wins by racing ahead and winning developers worldwide.”
Read more at CNBC here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship.
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